Loan Modification Process

I’m not blogging about the loan modification process to educate people about the hows and whys and the wheres of the entire setup. I’m not blogging about the shrewdness of getting help with my loan modification to incite or inspire other people to try to get their applications for it approved in a manner similar to which my application was approved. I’m not blogging about how people think they can hope now loan modification is simpler, more efficient, or easier to procure than it was some five years ago, when people living in the United States were not as concerned or alarmed as they are now about such things as recession, sudden bankruptcy, and a growing unemployment rate. I’m not blogging about why a USA loan modification is probably better than any other similar third party or direct arrangements a person may have with their lender or any other institution that they may have dealings with. I’m not blogging about how important it is to collect data online and eventually compile an active file of loan modification leads for possible future use. I’m not blogging about how extremely important it is to get a loan modification guide and studying all the details and particulars surrounding the entire process, so as to allow a greater understanding of what to do and what not to do when applying for a loan modification.

My point in writing about all of this is the fact that I had never expected to fall into such hardship that would, in turn, drive me into deep debt. I practically had to borrow to pay for what I had earlier borrowed. I had always thought things would pan out better, since I do live in the most progressive and economically stable country in the world, but I guess that’s no longer the truth now, since the United States is still reeling from the sudden loss of financial footing. It burns me so much that just like almost everyone else, I am no actively seeking a loan modification in California, and I’m not even sure if I will get approval for this.

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How Do I Qualify for Loan Modification?

In many instances a homeowner is set up on a repayment plan (forbearance) plan prior to completing a loan modification which allows a servicer (mortgage company) to monitor the financial condition of a homeowner during the special forbearance period to be sure the homeowner will be able to make the payments to the lender. There are vital documents required that are reviewed by a mortgage company.

Hardship Letter:
To meet the requirements for a loan modification homeowners must have a compelling hardship. The hardship must be documented and given as many facts as possible to support your case. A is very subjective and pretty much a requirement in the course of getting a loan modification. There are a few adversities that are considered charitable and do not meet the criteria quitting a job or reducing the amount of hours worked are typically unacceptable. The adversities are documented and if there is an additional non-payment the homeowners can not use the same reason for non-payment otherwise their previous adversities was really not over and in many instances the homeowners are not allowed a loan modification.

Financial Statement:
This is used to verify the homeowners ability to pay. This is usually the first form reviewed by the lenders mediator. This form must clearly indicate monthly wages and expenses as well as current assets and liabilities. This is what makes and breaks the entire loan modification review. This form also shows whether or not the homeowner will be able to make payments if the loan is modified. There must be a surplus wages at the end of the loan modification or else the plan will be denied. The plan must be affordable. If a homeowner is severely over-leveraged with debt there is little chance that a loan modification will cure the delinquency. Monthly expenses are reviewed to determine what bills are necessary and what are unnecessary. Necessary expenses are food, utilities and gas and an example of unnecessary are entertainment expenses, expensive phone plans and unsecured debt. Household expenses loan payments, utilities, and taxes take up most of the monthly budget. Do not make operating costs look unreasonable will be a red flag to get further detail. The negotiators will always look for assets that can be liquidated.

Proof of Salary:
The proof of wages is usually a paycheck stub, a P&L Profit and Loss Statement if self employed, or checking account report showing paycheck deposits. The proof of wages is required to prove the homeowner has steady wages. The homeowner must also give frequency of wages. The proof of wages must correspond with the wages shown on the financial report. Resolve any discrepancies

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